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What really happened at LivingSocial?

finance.fortune.cnn.com

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Re: What really happened at LivingSocial?

#111

Post by tptacek »

damoncali wrote: post #106
tptacek wrote: post #103

Earlier quoted context omitted.

That is the audience sentiment PrivCo is counting on.

They're counting on me wanting to see the truth and thinking that they're scammy and unreliable? Seems like an odd strategy.

Do you really feel like your perspective on LivingSocial's core business is underrepresented, and that continually reminding us of how little regard you have for it is a contribution?

Because I actually do think that the untrustworthiness of this report, and, more importantly, the implications of that untrustworthiness is underrepresented and is worth talking about more. Whereas a chin-wagging circle of commentary about how unsustainable daily-deals sites are does not seem particularly valuable.

(This comment reads meaner than I intend it to be.)

Re: What really happened at LivingSocial?

#112

Post by [deleted] »

mdc wrote: post #31
jpdoctor wrote: post #15

Oh for chrissake: Just release the funding docs and term sheet. The letter was full of possible half-truths(eg: 'There is no "4x liquidation preference"' does not preclude 3x or 5x or any other number besides 4), so smart employees should be looking until they see the docs.

He says it slides but "gets nowhere near 4x". That's clear enough to preclude 5x.

[deleted]

Re: What really happened at LivingSocial?

#113

Post by damoncali »

tptacek wrote: post #111
damoncali wrote: post #106

Earlier quoted context omitted.

They're counting on me wanting to see the truth and thinking that they're scammy and unreliable? Seems like an odd strategy.

Do you really feel like your perspective on LivingSocial's core business is underrepresented, and that continually reminding us of how little regard you have for it is a contribution? Because I actually do think that the untrustworthiness of this report, and, more importantly, the implications of that untrustworthiness is underrepresented and is worth talking about more. Whereas a chin-wagging circle of commentary ab…

Fair point. The dishonesty is simple to me: open and shut. It's in the state filings. PrivCo at best got pretty bad information and published it without verifying it, and at worst made a bunch of stuff up to drive traffic. Not much to discuss there - it's bad.

LivingSocial's business, though, changes over time, and is worth discussing from time to time. Down rounds are always interesting to me. The decreasing margin in the deals business is interesting to me. That LS still apparently plans an IPO, in the face of a fairly brutal down round is interesting to me. That they think they can be worth $1B is interesting. (As is the current valuation when you read between the lines). The sliding liquidation preference is whole discussion unto itself. But yes, it's a pretty well trodden topic when reduced to "LS's business model is flawed". So I'm guilty there.

Re: What really happened at LivingSocial?

#114

Post by anon808 »

tptacek wrote: post #94
anon808 wrote: post #91

Earlier quoted context omitted.

Just because privco is full of shit, doesn't mean livingsocial isn't in trouble. The sad truth is that this down round will hurt the employees more than they know, or are being told. Down rounds aren't made under the same terms as up rounds where the company has the advantage. When the investor has the advantage the terms will weigh heavily in favor of the investor protecting their cash, so what looks like equity tod…

I don't care. I don't follow LivingSocial. The question I answered was, "how do I know PrivCo is the one being dishonest?"

the question was "How do we know LivingSocial is the truthful one?" which is different than "how do I know PrivCo is the one being dishonest?".

Re: What really happened at LivingSocial?

#115

Post by btilly »

PrivCoTeam wrote: post #100

PrivCo has absolutely NO short positions in any private company we cover. These are PRIVATE companies and with rare exception do not trade. Nor do we earn any fees from private companies we cover (and we do NOT accept paid advertising, unless you count a the standard Google links). We have no agenda other than to try and publish facts, and what LivingSocial announced yesterday immediately struck us as misleading and…

Nobody is debating whether LivingSocial has a world of problems.

We're debating the veracity of all of the non-public details that made your report interesting. Well, in theory we are. Only one side of the debate seems to have showed up.

Re: What really happened at LivingSocial?

#116

Post by bitcartel »

anon808 wrote: post #91
tptacek wrote: post #87

Earlier quoted context omitted.

Because PrivCo published material falsehoods that are easy to refute alongside the (likely) falsehoods that are harder to refute.

Just because privco is full of shit, doesn't mean livingsocial isn't in trouble. The sad truth is that this down round will hurt the employees more than they know, or are being told. Down rounds aren't made under the same terms as up rounds where the company has the advantage. When the investor has the advantage the terms will weigh heavily in favor of the investor protecting their cash, so what looks like equity tod…

The CNN article has been updated again:

"That same source insists LivingSocial was not days or weeks away from a bankruptcy filing, adding that it had around $28 million in cash at its February low point and was on plan to steadily increase that number even without the new financing. Had that figure not increased, and had no new investment been forthcoming, it still could have survived for several more months."

Regardless of Privco, not exactly encouraging for employees and prospective merchants. I also wonder how much of the $110 million will actually be used for growing the business versus covering current liabilities, such as those due to existing merchants.

Re: What really happened at LivingSocial?

#117

Post by philwelch »

tptacek wrote: post #108
philwelch wrote: post #105

Earlier quoted context omitted.

Can they be refuted independently of LivingSocial's say-so?

Like, which firms did and didn't invest in LivingSocial?

Yeah. That's not public information for a private firm, is it?

Mind you, I don't trust anyone's word on this.

Re: What really happened at LivingSocial?

#119

Post by ImprovedSilence »

losvedir wrote: post #44
tptacek wrote: post #2

LivingSocial's response is extremely damning of "PrivCo".

Was the "UPDATE" to the article published when you left your comment? UPDATE: Just got off the phone with Hamadeh [PrivCo CEO], who is standing by his original report. He says O'Shaughnessy is misleading his own employees, and that classifying the round as "equity" is a technicality given all of the debt-like provisions PrivCo continues to believe were attached. He also says that PrivCo spoke with a LivingSocial spok…

If they did, in fact, send an email to LS, I would hazard to guess they would send it at 2:30 am.

Re: What really happened at LivingSocial?

#120

Post by [deleted] »

onetimecomment wrote: post #68

privco's sales people e-mailed the address on my company's domain and offered research services. when we declined, four days later an article ran on privco (an 'exclusive') reporting that we refused comment on something we had never seen which was an article full of made-up dire horseshit. so I was left explaining to my employees why this company was out to get us and no, I wasn't misleading them about our finances.…

[deleted]
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